What indicates a potential red flag in a client's banking activity?

A large, unexplained transfer into a client's account is a notable red flag because it raises concerns regarding the source of the funds and the intent behind such transactions. Money laundering often involves the movement of large sums of money that do not have a clear or legitimate origin, and when such transfers occur without an apparent explanation or correlation to the client's financial activities, they warrant further investigation. This can imply that the funds may be linked to illicit activities.

In contrast, regular deposits that align with a client’s known income, payments made by check from known sources, and scheduled withdrawals for known expenses typically suggest legitimate financial behavior. These activities usually indicate that the transactions are associated with lawful income and expenses, thus making them less likely to be connected to money laundering activities.